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Production Inefficiency in Fed Cattle Marketing and the Value of Sorting Pens into Alternative Marketing Groups Using Ultrasound Technology AgEcon
Koontz, Stephen R.; Hoag, Dana L.; Brethour, John R.; Walker, Jodine L..
The cattle industry batch markets animals in pens. Because of this, animals within any one pen can be both underfed and overfed. Thus, there is a production inefficiency associated with batch marketing. We simulate the value of sorting animals through weight and ultrasound measurements from original pens into smaller alternative marketing groups. Sorting exploits the production inefficiency and enables cattle feeding enterprises to avoid meat quality discounts, capture premiums, more efficiently use feed resources, and increase returns. The value of sorting is between $15 and $25 per head, with declining marginal returns as the number of sort groups increases.
Tipo: Journal Article Palavras-chave: Cattle feeding; Production efficiency; Simulation; Sorting; Value-based marketing; Ultrasound; Agribusiness; Livestock Production/Industries; Marketing; Research and Development/Tech Change/Emerging Technologies; C15; D21; D23; Q12.
Ano: 2008 URL: http://purl.umn.edu/47266
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Impact of Beef Quality on Market Signals Transmitted by Grid Pricing AgEcon
Johnson, Heather C.; Ward, Clement E..
Value-based marketing is shaping cattle production; however, market signals differ dramatically depending on carcass quality. This study applies a two-stage coefficients of separate determination procedure to four regional fed cattle datasets sorted by grid value and by carcass quality attributes. Weight is the strongest signal sent when higher valued cattle and better quality cattle are sold on a grid. Quality characteristics send stronger signals when lower valued cattle and poorer quality cattle are sold on a grid. Producers of lower quality cattle can potentially gain $52 to $149 per head by improving quality and $113 to $150 per head by adding weight.
Tipo: Journal Article Palavras-chave: Beef; Cattle; Carcass; Quality; Coefficients of separate determination; Incentives; Market signals; Value-based marketing; Livestock Production/Industries; Marketing; Q11; Q13.
Ano: 2006 URL: http://purl.umn.edu/43750
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Market Signals Transmitted by Grid Pricing AgEcon
Johnson, Heather C.; Ward, Clement E..
Grid pricing improves the flow of information to producers, but market signals sent by grids may not be clearly understood. This study uses a two-stage Coefficients of Separate Determination process, four sets of fed cattle carcass data, and sensitivity analyses to identify market signals sent by grid pricing. Weight sends a stronger market signal than carcass quality characteristics such as quality and yield grade. Although grids are shaping production, market signals indicate that lower quality carcasses are penalized more than higher quality carcasses are rewarded. Sensitivity analyses suggest changes in quality and yield grade discounts have the greatest impact on market signals.
Tipo: Journal Article Palavras-chave: Beef cattle; Coefficients of Separate Determination; Grid pricing; Market signals; Value-based marketing; Demand and Price Analysis.
Ano: 2005 URL: http://purl.umn.edu/30980
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